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Firm life cycle and earnings management: The moderating role of state ownership

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  • Nguyen Vinh Khuong
  • Le Huu Tuan Anh
  • Nguyen Thi Hong Van

Abstract

The study examined the relationship between firm life cycle (FLC) and earnings management (EM) in the Vietnamese context with the moderating role of state ownership (SOE). We used the sample of 622 Vietnamese listed companies over the period 2010–2019. To eliminate autocorrelation and heteroscedasticity violations, we utilized FE Robust on all models. The data show that accrual earnings management (AEM) behavior varies between FLC phases. The results revealed a U-shaped pattern, with discretionary accruals (DAs) being more remarkable in the introduction and decline stages and lower in the remaining stages. The findings on the connection between FLC and real earnings management (REM) varied depending on the REM technique used. The results support the involvement of SOE as a moderator in both the FLC—REM and the FLC—EM relationship. This study significantly contributed to the existing literature about FLC and EM behavior.

Suggested Citation

  • Nguyen Vinh Khuong & Le Huu Tuan Anh & Nguyen Thi Hong Van, 2022. "Firm life cycle and earnings management: The moderating role of state ownership," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2085260-208, December.
    • Handle: RePEc:taf:oaefxx:v:10:y:2022:i:1:p:2085260
    DOI: 10.1080/23322039.2022.2085260
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    Cited by:

    1. Maria Kovacova & Lenka Hrosova & Pavol Durana & Jakub Horak, 2022. "Earnings management model for Visegrad Group as an immanent part of creative accounting," Oeconomia Copernicana, Institute of Economic Research, vol. 13(4), pages 1143-1176, December.

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